New Delhi: Defence Minister AK Antony has opposed moves to raise the Foreign Direct Investment (FDI) in defence manufacturing from 26 percent to 49 percent. He said that it will affect growth of domestic industry, officials said on Wednesday.

Antony has written a letter to Commerce Minister Anand Sharma saying that his ministry was of the view that the FDI in defence manufacturing sector should stay at 26 percent, they said. The defence minister, who has consistently pitched for growth of domestic defence industry, said that allowing foreign companies to set up manufacturing facilities will hamper growth of indigenous research and design development, they said.

Sources said Antony also stated that the FDI cap should not be raised as the country cannot be dependent on foreign companies or policies of countries of their origin in defence sector on a long-term basis.

However, he added that permission for the FDI beyond 26 percent can be given on a case-to-case basis if it would lead to access to modern technology. He said such clearance can be given by the cabinet committee on security.

The sources said a committee headed by Economic Affairs Secretary Arvind Mayaram had recommended that the FDI limit be raised to 49 percent in several sectors through automatic route.

The committee had suggested that the FDI in defence be raised to 49 percent under the government approval route from 26 percent at present. They said that the commerce ministry had also proposed hiking the FDI in defence.